Death Tax Refusing to Rest In Peace

by M-Gillies

If you received a sizable sum for your inheritance, you may be tempted to chuck the working life and live a life of "inherited wealth." Before you do that -- or make any other major financial or life decision, consult a financial planner

As of May 31, 2011, two bills dealing with estate tax have been introduced in the United States House of Representatives to make the current federal estate tax exclusion and rate permanent.

Over the past 10 years, since the result of Congress passing the Taxpayer Relief Act of 2001, the federal estate tax has been successively been reduced from a $1 million exclusionary tax rate to a current $5 million rate.

After Congress failed to address the expiring estate tax issue in 2009, the estate tax rate could be repealed within this year, reverting it back to its 2001 levels.

To circumvent matters, the U.S. House of Representatives introduced H.R. 1259, The Bipartisan Death Tax Repeal Permanency Act, which calls for repealing of the federal estate tax, repealing of the federal generation-skipping transfer tax and an extension of the current $5 million lifetime gift tax exemption and 35% gift tax rate.

What this means is, while the estate tax is in effect, it has a deadline of January 1, 2013, meaning, unless Congress does something to prevent the repeal, estates worth more than $1 million after 2013 could be taxed.

Read more:

What is the Federal Estate Tax? | About.com

What is the Future of Estate Taxes? | About.com

Revisiting H.R. 1259, The Bipartisan Death Tax Repeal Permanency Act | About.com

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